FY2019 Annual Results 1 12 September 2019
Contents Page Financial Review – FY2019 4 Property Business – Hong Kong Land Bank 9 Property Investment 12 Property Development 18 Property Business – Mainland China Land Bank 22 Property Investment 26 Property Development 30 Hotel Business 34 Market and Business Prospects 36 2
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Cullinan West, West Kowloon, Hong Kong ICC and IFC in Hong Kong ICC and IFC in Hong Kong ICC / IFC Hong Kong FINANCIAL REVIEW – FY2019
Results Snapshot Balance Dividend Profit Sheet Underlying Full-year Net EPS DPS Gearing HK$11.18 HK$4.95 Ratio 12.9% 6.6% yoy 6.5% yoy 5
Financial Highlights FY2019 (1) FY2018 Change Profit attributable to the Company’s shareholders - Underlying (2) (HK$ mn) 32,398 30,398 +6.6% - Reported (HK$ mn) 44,912 49,951 -10.1% Basic earnings per share - Underlying (2) (HK$) 11.18 10.49 +6.6% - Reported (HK$) 15.50 17.24 -10.1% Final dividend per share (HK$) 3.70 3.45 +7.2% Total dividend per share (HK$) 4.95 4.65 +6.5% (1) The results for the year ended 30 June 2019 have been impacted by the adoption of new accounting standard HKFRS 15 for revenue recognition, which affected timing of property sales recognition in Hong Kong (2) Excluding the effect of fair value changes on investment properties net of deferred taxation and non-controlling interests 6
Earnings Drivers Profit Breakdown by Segment (1) FY2019 FY2018 Change (in HK$ mn) (1) Property rental - Hong Kong 15,373 14,549 - Mainland 3,746 3,534 - Singapore 559 564 Sub-total 19,678 18,647 +5.5% (2) Property sales - Hong Kong 16,395 13,936 - Mainland 2,302 2,314 - Singapore 0 11 Sub-total 18,697 16,261 +15.0% (3) Hotel operation 1,433 1,470 -2.5% (4) Other businesses 4,580 4,488 +2.0% Total (1)+(2)+(3)+(4) 44,388 40,866 +8.6% (1) Including shares of associates and joint ventures 7
Financial Position 30 Jun 30 Jun 31 Dec As at 2018 2019 2018 Shareholders’ equity (HK$ mn) 566,405 545,856 539,098 - Shareholders’ equity per share (HK$) 195.5 188.4 186.1 Net debt (HK$ mn) 72,968 64,389 65,339 Net gearing ratio (1) 12.9% 11.8% 12.1% FY2019 FY2018 Interest cover (2) 14.6x 17.6x (1) Calculated on the basis of net debt to Company’s shareholders’ funds (2) Measured by the ratio of operating profit to total net interest expenses including those capitalized 8
Victoria Harbour, North Point, Hong Kong PROPERTY BUSINESS - HONG KONG LAND BANK
Land Bank in Hong Kong Total land bank as at 30 June 2019: 58.0mn (1) Residential (completion after June Office 2024) 31% 30% Residential (completion Shopping prior June Centre 2024) 36% Hotel 53% Shopping 12% Centre 5% Office Industrial 3% Residential 12% Industrial 9% Hotel 6% 3% Completed properties (2) Properties under development Total: 32.9mn sq.ft. Total: 25.1mn sq.ft. (1) In attributable terms (2) An overwhelming majority are for rent / investment 10
Land Acquisitions in Hong Kong Added 7 sites through different means in FY2019 Stake Method of Attributable Location Usage Acquisition GFA (sq.ft.) (%) Residential/ Tai Po Town Lot No. 244 100 Government Tender 917,000 Shops Tseung Kwan O Town Lot No. 131 74 Data Centre Government Tender 896,000 (Acquired by SUNeVision) New Kowloon Inland Lot No. 6551, Residential/ 100 Government Tender 649,000 Kai Tak Shops Lot 2091 in DD 105, Shek Wu Wai, 54 Residential Farmland Conversion 265,000 Yuen Long Tuen Mun Town Lot No. 463 59 Residential Farmland Conversion 205,000 Lot 2579 in DD 92, Kwu Tung, 100 Residential Farmland Conversion 162,000 Sheung Shui 233 Prince Edward Road West, Old Building 58 Residential 42,000 Kowloon City Redevelopment Total 3,136,000 Also reached a lease modification agreement for the redevelopment of an industrial building in Tsuen Wan into a residential project with a GFA of 168,000 sq.ft. 11
Metroplaza, Kwai Fong, Hong Kong in Hong Kong ICC / IFC Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT
Healthy Rental Income from Diversified Portfolio Gross Rental Income by Sector in Hong Kong (1) FY2019 HK$ mn 19,698 (+6.4% yoy) HK$19,698mn 20,000 18,506 6.4% yoy 18,000 (+5.4% yoy) 6,434 16,000 6,104 14,000 12,000 Shopping Office Centres 33% 10,000 54% 8,000 10,699 (+7.5% yoy) 9,954 6,000 Others 4,000 13% (2) 2,000 2,566 2,448 (+4.8% yoy) Overall 0 Occupancy FY2018 FY2019 ~94% (2) Office Shopping Centres Others (1) Including shares of Associates and JCEs (2) Residential, industrial and car parks 13
Diversified Quality Retail Portfolio of 12mn sq.ft. During the year, the Group’s retail YOHO Mall, Yuen Long portfolio performed satisfactorily IFC Mall Weakening consumer sentiment and declining tourist spending have posed challenges in the retail market for recent months Adopt a proactive approach in managing the malls Tenant and trade repositioning Ongoing asset enhancements Enrich customer service through the use of digital applications 14
Latest Retail Addition – V Walk atop MTR Nam Cheong Station V Walk, West Kowloon Stake: 100% Total GFA: 298,000 sq.ft. Underneath Cullinan West residential development Opened in July 2019 Almost fully leased with an array of local favourites 15
Balanced and Diversified Office Portfolio of Over 10mn sq.ft. Millennium City Cluster ICC Wan Chai & Attri. GFA: 1.7mn sq.ft Causeway Bay IFC Attri. GFA: 2.5mn sq.ft (2) Occupancy:94% Occupancy:99% Attri. GFA: 1.0mn sq.ft Attri. GFA: 1.8mn sq.ft Occupancy:99% Occupancy:98% (1) Occupancies as at 30 June 2019 (2) Included pre-leased area 16
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